Export of Pan Masala and Gutkha Cannot Be Classified as "Prohibited Goods" for Non-Declaration of Input Characteristics

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....CESTAT ruled that pan masala and gutkha exports could not be classified as "prohibited goods" merely for non-declaration of technical characteristics of inputs on shipping bills as required under DFIA scheme. The Tribunal found that Revenue failed to establish any export prohibition for these products or prove that exported goods were "resultant products" of duty-free imported inputs. Since conditions allegedly violated pertained to imports rather than exports, and appellants claimed no duty exemption on exports, confiscation was unjustified. The Tribunal emphasized that non-compliance with DFIA conditions might affect duty-free import eligibility but cannot render freely exportable goods as prohibited. Consequently, both the confiscation order and penalties under Sec. 113(1) were set aside, and the appeal was allowed.....